from the the-infinite dept

People tend to have a hard time discussing the two mathematical concepts of zero and infinity. It's not hard to understand why this is, of course, with reality being a material thing and both the lack of and the infinite amount of something being somewhat foreign. And this manifests itself in all sorts of disciplines, from cosmology to spirituality to physics. And, of course, economics, particularly in the digital age where many of the axioms surrounding physicality no longer apply to digitized goods. Zero and infinity play heavy roles here, both in the discussion of free content (zero) and the concept of digital and freely copyable goods as a resource (infinity). The economic nature of these concepts have long vexed established industries, even as some of us have pointed out how efficient and useful infinite digital goods can be if properly applied.

Industry rebuttals to the economics of all of this have mostly amounted to facile derision in the form of slandering younger generations who either "just want free stuff" or "want stuff they cannot afford." Neither makes much sense, with both claims easily disproven given statistics demonstrating how much more is spent by "pirates" than those who don't pirate content. The truth is that, while the average citizen likely can't speak eloquently about the economic laws at work for digital goods, they certainly can understand them intuitively. And this can be shown with piracy statistics for eBooks, which a recent study shows that eBook pirates tend to be both older and relatively affluent.

A new study, commissioned by anti-piracy company Digimarc and conducted by Nielsen, aims to shine light on eBook piracy. It was presented yesterday at The London Book Fair and aims to better understand how eBook piracy affects revenue and how publishers can prevent it.

In previous studies, it has been younger downloaders that have grabbed much of the attention, and this one is no different. Digimarc reveals that 41% of all adult pirates are aged between 18 and 29 but perhaps surprisingly, 47% fall into the 30 to 44-year-old bracket. At this point, things tail off very quickly, as the remaining ~13% are aged 45 or up. There are also some surprises when it comes to pirates’ income. Cost is often cited as a factor when justifying downloading for free, and this study has similar findings. In this case, however, richer persons are generally more likely they are to download.

With nearly half of eBook pirates falling into their thirties or forties, and the study later showing that two-thirds of eBook pirates have household incomes of at least $30k per year, and almost a third having incomes in six figures, this simply isn't a situation that can be explained away by pointing at young poor people. So, why do older, more affluent people pirate eBooks?

I would argue it's instinctual. Most of these people may not even be able to explain the term "marginal cost", but by instinct they feel that something that costs nothing to reproduce ought not to require payment. Their brains do this calculation behind the scenes, not thinking about the sunk costs of initial production, nor the sweat-equity spent by the content creator. Marginal cost is the term used by economists to explain pricing laws that emerged organically through human instinct.

This isn't to say that unauthorized downloading is somehow acceptable when eBook publishers wish against it. But it certainly does suggest that any eBook publisher, or publisher of other digital content, has a very high hill which it must roll its old business model wagon up to make it work. Human intuition is one hell of a thing to overcome. So much so, in fact, that it's likely the better strategy is to figure out how to make that intuition and infinite digital goods a boon rather than the enemy.

Now, it's worth noting that the price of eBooks was still a factor for those responding in the study, but not nearly the factor that convenience played.

Given the majority of pirates’ ability to pay, it comes as no surprise that convenience is the number one driver for people obtaining content from torrent sites. Cost still takes the number two position but a not inconsiderable four out of ten still believe that online retailers are lacking when it comes to content availability.

In other words, a huge amount of eBook piracy could likely be done away with immediately, if the content cost closer to what the buyer instinctually believes it ought to be and the content was at least as readily available for purchase as it is through pirated means. That really can't be that hard for eBook publishers to understand.

from the whatever's-the-most-profitable-terminology... dept

If you're a consumer, that piece of digital wordsmithery you purchased probably isn't worth the paper it isn't printed on. Like most digital media available for "purchase," ebooks are often "sold" as licenses that allow the publisher to control use of the product indefinitely, whether through DRM or by simply attaching EULAs no one will ever read to every download.

This works out great for publishers, who can make irrational, unilateral decisions to pull their catalogs from platforms as a "bargaining tool," leaving purchasers without access to their purchased goods. But publishers (including music publishers like UMG) only use the term "license" when it's most advantageous for them. When it comes to paying authors, the terminology suddenly changes. Now it's a "sale," with all the disadvantages for authors that entails.

"Sales" is a historical term, meant to reference physical sales and the additional costs (printing, packaging, shipping) built into the process. Licenses -- and the ebooks attached to them -- have none of these costs, hence the higher payout rate. But, according to a recently-filed lawsuit, Simon and Schuster is treating ebooks like physical sales in order to pay authors lower royalties.

The distinction is significant, because the royalty rate for sales is much lower than the rate for the license of rights. If categorized as a license the author receives 50% of net receipts, rather than 25% of net typically paid to authors for the "sale" of an eBook.

Jassin also points out that after Eminem's win over UMG on the sale/license issue (dealing with digital album/track sales), most publishers rewrote their contracts to make the screwing explicit.

In the wake of the Eminem decision, most publishers amended their contracts, so the sale or license of an "eBook" is unambiguously treated as a sale. The lawsuit, therefore, challenges the publisher's interpretation of their legacy or backlist contracts.

How much of this will hold up depends a lot on when contracts were rewritten. From the consumer end, "sold" ebooks certainly looked like licenses, at least up until S&S rewrote its terms of use. Up until January 2013, the terms of use contained this paragraph:

Subject to your strict compliance with these TOU, S&S grants you a limited, personal, non-exclusive, revocable, non-assignable and non-transferable license to view, use and/or play a single copy of the Materials and download one copy of the Materials on any single computer for your personal, non-commercial home use only, provided that you retain all trademark, copyright and other proprietary notices contained in the Materials. Modification of the Materials or use of the Materials for any other purpose is a violation of S&S's or its licensor's copyright, trademark and other proprietary rights. The use of any such Materials on any other web site or networked computer environment without S&S's express written consent is prohibited.

This paragraph disappeared shortly after that, suggesting some rewriting of policies occurred as a result of UMG's settlement with Eminem in late 2012. Due to the statute of limitations, the plaintiff will only be able to challenge the publisher's last six years of royalty payments, but as recently as three years ago, Simon & Schuster was "licensing" books to customers while telling authors every ebook was being "sold."

Then there's this issue, which may result in this particular author finding he has nothing to sue about (although other authors contracted by S&S might):

According to a report in Law360, an unnamed spokesman for Simon & Schuster told Law360 that the division that published Dr. Blau's book, was sold (or was it licensed?) to another company in 1998, and that the publisher never published a digital edition of the book.

So, even if Blau's general complaint is legitimate in terms of how S&S is using sales v. licenses to decrease its royalty payouts, his specific complaint may be completely baseless.

from the time-to-pay-up dept

This isn't a huge surprise, but this morning the Supreme Court refused to hear Apple's appeal of its loss in the case brought by the Justice Department for engaging in price fixing on ebooks with the big book publishers. During the course of the case and appeals, Apple worked out a settlement, agreeing to pay $450 million -- but only after the appeals process was exhausted. And, that's now happened. As with basically all appeals rejected by the Supreme Court, the court gave no reason. It just denied cert. Meanwhile, even as Apple has now lost the case, it did still succeed in forcing the price of many ebooks much, much higher.

In one of the most amazing statements this author has read, the company says it's trying to set up a deal with Sainsbury's Entertainment on Demand "to ensure that you have continued access to the vast majority of your purchased NOOK Books at no new cost to you" (emphasis added).

Of course, this is hardly a new phenomenon. Remember when Microsoft had a DRM it called "PlaysForSure"? And remember when it shut down those servers, blocking people from ever moving that content to new machines? Or how about when Scholastic shut down its Storia DRM'd book offering, meaning parents who purchased ebooks for their kids had digital pixie dust instead. Or when Rhapsody/RealNetworks killed off an old DRM, killing off access to songs people had legitimately paid to access. Or when digital comics company JManga shut down and with it took down access to purchased content. And remember when Adobe changed its DRM and made old ebooks obsolete?

This kind of thing happens again and again and again. And for what? What benefit does it actually create for copyright holders? At best it only serves to entrench the most dominant retailers, taking power away from the copyright holders (who already took power away from the actual creators). And it tends to do nothing to stop actual copyright infringement, because all of those works are still readily and easily available.

from the used-and-abused dept

I really do hate that most of the time we've spent here talking about eBooks, a digital technological advance that should be all about the wonderful expansion of knowledge and reading, is instead spent talking about that purchasing minefield eBooks have created by not actually allowing for true ownership. Whether it's retailers' DRM efforts to restrict access to already-paid-for books or the inability to get at the books you've purchased simply because you've moved around the world a bit, it's been made abundantly clear to the average reader that they do not own the eBooks they've purchased.

Well, folks in the Netherlands are having that point driven home to them at this moment as well, though there appears to be some mystery over who is actively teaching them this lesson. It seems that many citizens are getting emails accusing them of illegally selling unwanted eBooks.

In an email titled “Illegal dissemination of digital books”, sellers of pre-owned eBooks were warned, apparently by Dutch anti-piracy outfit BREIN, that their activities were illegal.

“The Brein Foundation acts against piracy of music, film, interactive software and digital books on behalf of rights and stakeholders such as authors, performers, publishers, producers and distributors,” the email begins. “We’ve detected that you are distributing digital books without permission being granted by the copyright holders. This practice is unlawful towards the rights-holders and if you infringe you are liable for the damage they suffer as a result.”

The email goes on to state that the fine for this "infringement" is roughly $20k and up to six months in the clink -- all, keep in mind, for selling eBooks that had been legitimately purchased. Part of the problem here, though, is that nobody has sussed out who exactly is sending these letters, because BREIN has indicated it ain't them.

However, according to BREIN chief Tim Kuik the emails are nothing to do with his organization.

While BREIN are hardly supporters of people selling used product, the anti-piracy group says it only usually targets those attempting to sell large quantities of illegitimate products online.

So, essentially: people selling their legitimately purchased eBooks is totally illegal, we just aren't the clowns sending out these threat letters. Which gets us nowhere, of course, because it avoids the key issue at hand: do people who buy eBooks own those eBooks or not? As both a reader and a writer, I'm frankly tired of having this question even come up. If eBooks are not owned upon purchased, and are instead licensed or rented, then that's a fact that needs to be made extremely clear to the buyer. And I don't mean that it gets buried in a Terms of Service document that nobody reads. I mean abundantly clear.

But that won't actually happen, because sellers know that as soon as they get in front of buyers and tell them they aren't actually buying what they're paying for, those purchases will dry up faster than a spill at a paper towel convention. So, who is threatening Dutch readers with jail time for selling a thing they bought? We don't know for sure and it really doesn't matter. The important bit is getting someone on the side of the consumer in this insane fight.

from the open-it-all-up dept

Craig Mod has a fascinating article for Aeon, talking about the unfortunate stagnation in digital books. He spent years reading books almost exclusively in ebook form, but has gradually moved back to physical books, and the article is a long and detailed exploration into the limits of ebooks today -- nearly all of which are not due to actual limitations of the medium, but deliberate choices by the platform providers (mainly Amazon, obviously) to create closed, limited, DRM-laden platforms for ebooks.

When new platform innovations come along, the standard progression is that they take the old thing -- whatever it is they're "replacing" -- and create a new version of it in the new media. Early TV was just radio plays where you could see the people, for example. The true innovation starts to show up when people realize that you can do something new with the new media that simply wasn't possible before. But, with ebooks, it seems like we've never really reached that stage. It's just replicated books... and that's it. The innovations on top of that are fairly small. Yes, you can suddenly get any book you want, from just about anywhere and start reading it almost immediately. And, yes, you can take notes that are backed up. Those are nice. But it still just feels like a book moved from paper to digital. It takes almost no advantage of both the ability to expand and change the canvas, or the fact that you're now a part of a world-connected network where information can be shared.

While I don't think (as some have argued) that Amazon has some sort of dangerous "monopoly" on ebooks, Mod is correct that there's been very little pressure on Amazon to continue to innovate and improve the platform. And, he argues (quite reasonably), if Amazon were to open up its platform and let others innovate on top of it, the whole thing could become much more valuable:

It seems as though Amazon has been disincentivised to stake out bold explorations by effectively winning a monopoly (deservedly, in many ways) on the market. And worse still, the digital book ‘stack’ – the collection of technology upon which our digital book ecosystems are built – is mostly closed, keeping external innovators away.

To understand how the closed nature of digital book ecosystems hurts designers and readers, it’s useful to look at how the open nature of print ecosystems stimulates us. ‘Open’ means that publishers and designers are bound to no single option at most steps of the production process. Nobody owns any single piece of a ‘book’. For example, a basic physical book stack might include TextEdit for writing; InDesign for layout; OpenType for fonts; the printers; the paper‑makers; the distribution centres; and, finally, the bookstores that stock and sell the hardcopy books.

And, on top of this, people creating "ebooks" are limited to the options given to them by Amazon and Apple and Google. And then it all gets locked down:

Designers working within this closed ecosystem are, most critically, limited in typographic and layout options. Amazon and Apple are the paper‑makers, the typographers, the printers, the binders and the distributors: if they don’t make a style of paper you like, too bad. The boundaries of digital book design are beholden to their whim.

The fact that all of these platforms rely on DRM -- often at the demands of short-sighted publishers -- only makes the problem worse:

The potential power of digital is that it can take the ponderous and isolated nature of physical things and make them light and movable. Physical things are difficult to copy at scale, while digital things in open environments can replicate effortlessly. Physical is largely immutable, digital can be malleable. Physical is isolated, digital is networked. This is where digital rights management (DRM) – a closed, proprietary layer of many digital reading stacks – hurts books most and undermines almost all that latent value proposition in digital. It artificially imposes the heaviness and isolation of physical books on their digital counterparts, which should be loose, networked objects. DRM constraints over our rights as readers make it feel like we’re renting our digital books, not owning them.

If ebook platforms and technology were more open, it's quite conceivable that we'd be experiencing a different kind of ebook revolution right now. People could be much more creative in taking the best of what books provide and leveraging the best of what a giant, connected digital network provides -- creating wonderful new works of powerful art that go beyond the standard paper book. But we don't have that. We have a few different walled gardens, locked tight, and a weak recreation of the paper book in digital form.

It's difficult to mourn for lost culture that we never actually had, but it's not difficult to recognize that we've probably lost a tremendous amount of culture and creativity by not allowing such things to thrive.

from the because-of-course dept

For many years, despite claims from legacy copyright industry extremists who sought to blame everyone else for any piracy issues, we've pointed out that the reality is almost always that piracy is their own fault for failing to provide convenient, reasonably priced alternatives to the public. When they actually do that, piracy rates almost always drop significantly. And now we have even more proof that these legacy industry insiders know this and don't care.

You may remember that, two years ago, Apple was found guilty of price fixing for ebooks, in an effort to break Amazon's hold on the market and to artificially inflate the price of ebooks, creating significant consumer harm. Apple agreed to settle with the government last year, but dependent on how its appeals process went. Well, the Second Circuit appeals court was... unimpressed with Apple's appeal and has upheld the original ruling. The ruling (and the dissent) are interesting reads, but perhaps most interesting is the tidbit in which the big publishers admit that what they're doing will increase piracy, but they don't care because they so badly want to raise prices from Amazon's established $9.99 per ebook.

The most significant attack that the publishers considered and then undertook, however, was to withhold new and bestselling books from Amazon until the hardcover version had spent several months in stores, a practice known as “windowing.” Members of the Big Six both kept one another abreast of their plans to window, and actively pushed others toward the strategy. By December 2009, the Wall Street Journal and New York Times were reporting that four of the Big Six had announced plans to delay ebook releases until after the print release, and the two holdouts — Penguin and Random House — faced pressure from their peers.

Ultimately, however, the publishers viewed even this strategy to save their business model as self‐destructive. Employees inside the publishing companies noted that windowing encouraged piracy, punished ebook consumers, and harmed long‐term sales. One author wrote to Sargent in December 2009 that the “old model has to change” and that it would be better to “embrace e‐books," publish them at the same time as the hardcovers, “and pray to God they both sell like crazy.” .... Sargent agreed, but expressed the hope that ebooks could eventually be sold for between $12.95 and $14.95. “The question is,” he mused, “how to get there?”

In other words, the publishers were so focused on wanting to raise the price of ebooks, they were willing to embrace a solution that they knew both encouraged piracy and harmed long-term sales.

It really makes you wonder what kind of boards of directors these legacy publishers have, that they'd allow their companies to purposely shoot themselves in the foot, so they could raise prices and put in place windowing, even while recognizing all the harm it causes long term.

from the the-internet-as-curtained-off-room dept

Why is it that many efforts made "for the children" are so stupid most tweens could point out the obvious flaws? Back during the discussion of the UK's now-implemented ISP porn filtration system, Rhoda Grant of the Scottish Parliament wondered why the internet couldn't be handled the same way as television, where all the naughty "programming" isn't allowed to take to the airwaves until past the nationally-accepted bedtime.

“If there’s a watershed on the TV then why isn’t there one for the internet?”

Heise.de and Boersenblatt reported on Friday and Thursday that the Jugendschutzbehörde (Youth Protection Authority) has handed down a new ruling which extended Germany's Youth Media Protection Law to include ebooks.

As a result of a lawsuit (legal complaint?) over the German erotica ebook Schlauchgelüste (Pantyhose Cravings), the regulators have decided that ebook retailers in Germany can now only sell adult ebooks between 10 pm and 6 am local time (4 pm and midnight, eastern US).

The law behind this baffling proclamation states it is intended to protect children from coming to harm via "advertising or teleshopping." It was written in 2002, and was no less stupid in its belief that it could somehow force online retailers to take certain items off the "shelves" for two-thirds of the day. It's only receiving attention now because the Youth Protection Authority trying to hammer it into place over bits of the internet.

As Nate Hoffelder points out, the law's origins date back further to a point when such an action was both a.) not thoroughly ridiculous and b.) could mostly be enforced.

Boersenblatt says that the 10 pm to 6 am window originally came from restrictions on adult cinema (where it made sense), but I still don't understand what the regulators were thinking in applying that rule to the internet. Do they really believe that the adult internet, including porn sites, pirate sites, video sites, etc, is going to be turned off for 16 hours a day?

How will this work in practice? With lots of regulation, meddling, filtering and other stuff that won't actually keep the determined from accessing the porny ebooks they're looking for. Retailers selling ebooks in Germany (hello, Amazon!, etc.) will have to figure out what "youth-endangering" means, apply it to their existing ebook stock, and "wall off" those titles behind some sort of filtering system until 10 pm (local time) every night. Or else.*

*Unspecified legal action.

In other words, it won't work. And I wouldn't expect this application of the law to last for very long once larger internet retailers begin pointing out the amazing amount of unworkable flaws in this half-baked "plan" to save German kids from electronic erotica. I think the children this is supposed to protect will find that, when given the choice between hurtling a few governmental roadblocks for the opportunity to pay for written erotica and just, say, going almost anywhere else on the internet to get the same sort of stuff for free, they'll do the latter. And no one will be saved, Youth Protection Authority or no. But the YPA gets to say it tried, and I guess that's all that matters. It will just have to live with the mocking laughter.

from the gronk-gronk-gronk dept

Turns out I owe the NFL an apology. Yes, at the beginning of the year, we discussed how an erotic novel that includes Patriots tight-end (heh) Rob Gronkowski had been taken off the Amazon eBook store, with heavy speculation that it was due to the cover imagery.

Much of that speculation, including my own, focused on the fact that a portion of the Patriots trademarked uniforms, as well as a commemorative team patch, appeared on the cover and wouldn't it just be so NFL of the league to get the book taken down over the images being used. Turns out that wasn't the case. A lawsuit filed by two anonymous folks from Ohio likely had it removed and have followed that up with a lawsuit against the author, Amazon, and Apple over the use of their images on the cover. Yes, I'm talking about the two people appearing in the foreground. Those are apparently two people from Ohio who had no idea that an engagement photo of them was being used on the cover of a novella about a housewife banging Gronk.

"The cover of the book contains a photograph of the Plaintiffs which was taken as part of their engagement journey leading toward their wedding," states the complaint. "The photograph was appropriated by the Defendants for commercial gain without the permission of the Plaintiffs nor with the permission of any lawful copyright holder."

The lawsuit targets Noonan, and also Apple, Amazon.com and Barnes & Noble for allowing readers to access the work in iBooks, Kindle and Nook digital formats. The plaintiffs — captioned as "John Roe" and "Jane Roe" — are asserting violations of their rights of publicity under Ohio law.

And the inclusion of the service providers is where this lawsuit gets fun, because Amazon has already replied asserting section 230 protections, and I can't imagine that Apple and Barnes & Noble will be terribly far behind them in doing the same. Including the companies in the suit would obviously be advantageous from a monetary award standpoint, but that would rely on those companies being considered publishers of A Gronking To Remember. Are they?

No, I don't think so. In the context of books such as this, those companies do two things: they assist authors in self-publishing and they provide a platform where self-published works can be purchased. Neither of those actions are consistent with what a book-publisher does and have more in common with websites that allow readers to publish their own comments, which obviously falls under section 230 protections. The platform-providers, or service providers, didn't choose the cover images or create them, so I'm not sure where their culpability would lie. The inclusion of the service providers sounds like an attempt at a money-grab.

In any case, it looks like A Gronking To Remember will be remembered at the very least in court documents.

from the gronk-gronk-gronk dept

I'm a big fan of fan fiction for several reasons. I think it's awesome how a community can be so devoted to a particular something as to want to author their own creations around that something. I think it's cool when the original creators manage to use fan fiction as a mode to interact with their fans. Perhaps most of all, I love how fan fiction allows creative people to get silly on the subject of their work with parody and humor. For these reasons and more, I was particularly pleased when Amazon announced that they wanted to allow sales of this kind of work.

I'm less pleased to find that there are many ways in which those works can be taken down. See, Lacey Noonan is an author who goes out of her way to create parody novellas making fun of the romance genre. She recently released her short book about a housewife wanting to have sex with an NFL player.

Yes, the story quite prominently features Rob Gronkowski, New England Patriots tight end, and general all-around party boy. You know, this friggin' guy.

Yo soy fiesta. Yo soy fiesta. I am party. That's as Gronkowski as it gets. And it makes him a great subject for a laughable romance novella parody. Unfortunately, A Gronking To Remember has been removed from the Amazon store. Why? You see that small patch on Gronk's sleeve on the cover of the book that reads "MHK"? It's a tribute patch for the wife of the Patriot's owner and it appears to be the reason the book was taken down.

We're told the online retailer pulled the book because someone — perhaps the Patriots or the National Football League — objected to the book jacket, specifically the photo of Gronkowski that features the "MHK" patch on his uniform. (The team began wearing the patch in 2011 after the death Myra Kraft, wife of Patriots owner Robert Kraft.) In an e-mail, author Lacey Noonan told us she hadn't anticipated any problem with the Gronk picture.

"I didn't understand at the outset that Robert Kraft wouldn't want Myra Kraft and her philanthropical works associated with this," Noonan said in the e-mail. "Total newbie ignorance on my part. I believe — and hope — that's the only problem anyone has with the book since it is such obvious satire and parody."

If you look at the cover with an eye towards intellectual property concerns, you can clearly see how the team or the NFL might have concerns over the team's uniform appearing on the jacket, though it also seems clear that measures were taken to minimize how much the team logo and the uniform appears at all. But for this to be over the patch? And for that patch to result in the takedown of a hilarious piece of parody? It seems that someone needs to explain what rights exist for whom on a patch that consists of three letters, because we can't lose this literary treasure to that.